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DISABILITY RETIREMENT WHAT’S THE EFFECTIVE DATE ? " REVISITED "

DISABILITY RETIREMENT WHAT’S THE EFFECTIVE DATE ? " REVISITED ". THE PANEL. Alan Blakeboro, Esq., Board Counsel, SBCERS Jim Castranova, Esq., Sr. Staff Counsel, LACERA Phyllis Gallagher, Esq., Deputy C.C., Sonoma David Lantzer, Esq., Staff Attorney, OCERS. WHY THIS TOPIC ?.

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DISABILITY RETIREMENT WHAT’S THE EFFECTIVE DATE ? " REVISITED "

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  1. DISABILITY RETIREMENTWHAT’S THE EFFECTIVE DATE?"REVISITED"

  2. THEPANEL Alan Blakeboro, Esq.,Board Counsel, SBCERS Jim Castranova, Esq.,Sr. Staff Counsel, LACERA Phyllis Gallagher, Esq.,Deputy C.C., Sonoma David Lantzer, Esq., Staff Attorney, OCERS

  3. WHY THIS TOPIC? • CONFUSIONabout statutory language • INCONSISTENCYamong the37 Act systems in interpreting §31724 and in implementing procedures. • IMPACT ON STAKEHOLDERS: Applicant: benefit amount, FAS, retroactive sums System: obligation to avoid misuse of funds Plan Sponsor: faces the potential for over payments Tax Payers:moral dilemma of double dipping

  4. WHY REVISIT THIS TOPIC? Since our session in 2006, the courts provided judicial clarification of the provisions of § 31724. KATOSH v. SCERA (published - Court of Appeal) PORTER I, II v. OCERS (unpublished - Court of Appeal) WEILAND v. SBCERS (trial court)

  5. CASE CITES • Katosh v. SCERA 163 Cal.App.4th 56 (2008) • Porter v. OCERS (Porter I) (12/23/05, G034319) [2005 Cal.App.Unpub. LEXIS 11827] • Porter v. OCERS (Porter II) (12/18/08, G038450) [2008 Cal.App.Unpub. LEXIS 4930] • Weiland v. SBCERS (trial court) Santa Barbara Superior Court Case No. 1185956

  6. SESSION AGENDAWe will …. • Explain the confusion related to the provisions of § 31724. • Analyze the recent judicial decisions. • Discuss how to implement procedures consistent with recent court decisions.

  7. PART 1SOURCES OF CONFUSION

  8. SOURCE OF CONFUSION #1Multiple Dates Jim Castranova

  9. First, let’s look at the confusing controlling statute…

  10. § 31724The plain language tells us when the benefit begins…

  11. G. C. §31724 If the proof received, including any medical examination, shows to the satisfaction of the board that the member is permanently incapacitated physically or mentally for the performance of his duties in the service, it shall retire him effective on the expiration date of any leave of absence with compensation to which he shall become entitled under the provisions of Division 4(commencing with Section3201) of the Labor Code or effective on the occasion of the member's consent to retirement prior to the expiration of such leave of absence with compensation. His disability retirement allowance shall be effective as of the date such application is filed with the board, but not earlier than the day following the last day for which he received regular compensation. Notwithstanding any other provision of this article, the retirement of a member who has been granted or is entitled to sick leave shall not become effective until the expiration of such sick leave with compensation unless the member consents to his retirement at an earlier date. When it has been demonstrated to the satisfaction of the board that the filing of the member's application was delayed by administrative oversight or by inability to ascertain the permanency of the member's incapacity until after the date following the day for which the member last received regular compensation, such date will be deemed to be the date the application was filed.

  12. It provides many possible effective dates …. §31724(paraphrased) If the member is permanently incapacitated, he shall be retired as of: • Application date or “deemed” applicationdate • Not earlier than the day after the last day of regular compensation • On the expiration of leave of absence with compensation under Div. 4 of the Labor Code, or • Prior to the expiration of Div. 4 leave, if he agrees • On the expiration of sick leave with compensation, or • Prior to the expiration of sick leave, if he consents.

  13. Source of Confusion#1:Multiple Dates (Jane Doe, Applicant) TIMELINE OF EVENTS 1/1/001/2/02 9/3/03 3/4/04 3/1/06 4/1/06 Last dayAscertainsApp.Sick PayTTDSCD at workpermanencydate endsends granted (Work Comp Div.4) WHAT’S THE EFFECTIVE DATE???

  14. How do we coordinate all the possible effective dates… is there a model to follow???….. Hopefully, this session will provide some answers.

  15. SOURCE OF CONFUSION # 2 What is REGULAR COMPENSATION? Phyllis Gallagher

  16. SOURCE OFCONFUSION # 2: What is Regular Compensation??? • Is it pay for actually doing work? • Is it full or partial pay? • Is it consecutive pay? • Is it usual pay? • Does it include sick or vacation pay?

  17. In the past, the systems disagreed on the “the last day of regular compensation”… • LACERA “last day of work” (butt in the chair theory) • OCERS and SCERA “the last day any salary (i.e. wages for sick leave, vacation, annual leave, holiday) is received after leaving work” • SBCERS “the last day of work, with the effective date of benefits extended by pay received after leaving work compressed into consecutive, full pay periods.”

  18. RECENTLY The Court of Appeal defined “Regular Compensation” KATOSH v. SCERA This decision greatly impacts the way systems are now looking at this issue. (I will discuss the details later!)

  19. SOURCE OF CONFUSION # 3The “Deemed” Application Date David Lantzer Actual file dateDeemed file date

  20. SOURCE OF CONFUSION # 3:The “Deemed” Application Date • §31724 provides an exception that allows a member’s application date to be moved to a “deemed” application date under certain circumstances. • This may result in “an early effective date” of benefits that precedes the actual date of application.

  21. The “Deemed” Application Date Exception… The date of application may be moved to the day after the last day of regular compensation,iftheApplicant was delayed in filing his application by: • Administrative oversight, or • Inability to ascertain whether the incapacity was permanent Deemed Application Date Actual Application Date

  22. When should the application date be moved to an earlier “deemed” date? § 31724 does not give us the details: • What is “administrative oversight”? • How is permanency ascertained? • Ascertained by whom? • Is a member required to file promptly after learning of permanency?

  23. RECENTLY, • The Court of Appeal, in an unpublished opinion, clarified one of these questions. Mary Porter v. OCERS (Porter I) (I will discuss this court decision in Part II.)

  24. SOURCE OF CONFUSION # 4Leave w/ compensation under Labor Code (Division 4) Alan Blakeboro

  25. SOURCE OF CONFUSION # 4:Labor Code Division 4 BenefitsAll benefits or selected benefits? § 31724: ..benefit is effective on the expiration of the member’s leave of absence with compensation under Div. 4 of the Labor Code…(Workers’ Compensation pay) • Is this limited to 4850 pay?(full pay-safety) • Does it include Total Temporary Disability (TTD) payments ?

  26. RECENT COURT THINKING • The Court of Appeal, in an unpublished decision, mentioned the issue of TTD benefits. • Mary Porter v. OCERS (Porter II) (David will explain this reference) • A trial court ruled on the issue of TTD benefits • Weiland v. SBCERS (I will explain this ruling)

  27. Source of Concern # 5“DOUBLE DIPPING” Early effective dates potentially allow members to concurrentlyreceive: RETIREMENT PAYMENTS SICK LEAVE PAY HOLIDAY PAY VACATION PAY WORKERS’ COMP MISC. PAYMENTS

  28. DOUBLE DIPPING QUESTIONS • Is the member entitled to double payments? • Should applicant return prior pay to the employer? • Should Retirement take a credit for prior payments? • Should the employer try to recover the prior payments? • Is double dipping “none of our business”?

  29. RECENT COURT RULING Santa Barbara County Superior Court recently addressed the “Double Dipping” issue in: Weiland v. SBCERS (details to be explained in Part II)

  30. REVIEWSources of Confusion • Is there a model for managing all the potential effective dates? • What is “regular compensation”? • Is “Leave of absence w/ compensation under Div. 4 of the Labor Code” limited to 4850 benefits, or does it include TTD? • How does an applicant qualify for an early “deemed application date”? • Is “double dipping” from different benefit systems for the same period permissible or unacceptable?

  31. Part IIANALYZING THE CASE LAW

  32. Each of the following recent court decisions provides some part of the puzzle to clarify the issues we just outlined!

  33. PORTER (I and II) v. OCERS(unpublished) Here to discuss this case is: DAVID LANTZER, ESQ. STAFF ATTORNEY ORANGE COUNTY EMPLOYEES RETIREMENT SYSTEM

  34. MARY PORTER v. OCERS (Porter I)CASE FACTS _________________________________________________________________________________ 2/14/00June/July 003/5/01 Last day at learned disability was filed application Work permanent • Porter waited 9 months after ascertaining the permanency of her disability to file an application for disability retirement • The trial court determined that Porter was not entitled to an early effective date, because she unreasonably delayed her application after ascertaining permanency, but… The Court of Appeal reversed.

  35. Porter v. OCERS (Porter 1)CA Addressed the “Deemed” File Date ISSUE: • Can an applicant continue to delay in filing an application after ascertaining the permanency of their disability, and still qualify to have their application deemed filed on the day after the last day of regular compensation? Or, put another way… • In order to get an early “deemed” file date, is an applicant obligated to file within a reasonable time after ascertaining the permanency of their disability?

  36. PORTER I:“DEEMED” FILE DATE Court Of Appeal Holding: 31724 states that if an application for disability retirement is delayed by inability to determine the permanency of the incapacity, the application will be deemed filed on day after the last day of regular compensation. “Nothing in the language [of §31724] imposesany additional time mandates for filingonce the initial requirement is met.”

  37. PORTER 1COURT OF APPEAL REASONING Regarding § 31724: “…our responsibility is to determine its meaning from the words set out, not to insert language.”

  38. CLARIFICATION OF:“Deemed File Dates” Porter I court found: • There is no statute of limitations for filing a disability retirement application when the member cannot ascertain the permanence of the incapacity; • Therefore, a member can file an application at any time after permanence is established and have the deemed filed date set at the day after receipt of regular compensation.

  39. Porter 1Also Addressed“Regular Compensation” THE PARTIES’ POSITIONS: • OCERS position: Last day at work is not the last day of regular compensation. • Porter position: Concedes that the two days are not necessarily the same.

  40. PORTER 1Conclusion on “Regular Compensation” Porter 1 Dicta: • The regular compensation argument is irrelevant, • The statute language on Labor Code benefits and sick leave does not define regular compensation, but places potential limitations on when payments may begin.

  41. CLARIFICATION OF: “Regular Compensation” • The PORTER I court gave us no clear indication of what “regular compensation” is, • but it did provide some indication of what regular compensation is not.

  42. PORTER 1ALSO ADDRESSED TTD • Porter acknowledged that if she agreed to an effective date earlier than the expiration of her Labor Code benefits or her sick leave, she might be required to repay TTD payments or sick leave or both “to avoid double dipping”. • The court remanded the matter back to the trial court to determine whether Porter must reimburse any payments made to her for leave of absence or sick leave or both.

  43. CLARIFICATION OF: Labor Code Benefits • Porter 1 Court acknowledged that a member who is awarded an early effective date may have to pay back all benefits paid to him under Division 4 of the Labor Code, including TTD. • Porter herself acknowledged that an early effective date creates a double dipping scenario which should be avoided.

  44. PORTER IIProcedural Events On remand to the trial court, the court found: • Compensation under Div. 4 “means and includes every benefit …conferred by Division Four… • Porter is not entitled to disability retirement benefits until after her Workers’ Compensation benefits end. • The matter is remanded to the OCERS Board to determine the amount of Work Comp received and Porter’s ability to re-pay benefits so as to entitle her to an early effective date, but before the OCERS Board could address this…. PORTER FILED AN APPEAL.

  45. CLARIFICATION OF:Expiration of Labor Code Benefits • Porter IItrial court held that 31724 language delaying retirement benefits until the expiration of Labor Code Div. 4 benefits includes the expiration of all such benefits, including TTD. (Superior Court decision - not controlling)

  46. Porter II – Court of Appeal • Porter argued “leave of absence with compensation” under 31724 is limited to 4850 benefits for safety members and does not apply to her as she was a general member (bus driver). • OCERS argued that 31724 prohibits Porter from getting workers’ compensation TTD benefits and disability retirement simultaneously, and Porter’s appeal is premature because she did not exhaust her administrative remedies.

  47. Problems with Porter’s position: • It is contrary to the plain language of the statute • It is contrary to the purpose of the amendments to the statute as set forth in the legislative intent (i.e. depriving members of full workers’ comp. benefits) • It allows a member to receive concurrent payments from the county (i.e. double dip) • It is inconsistent with PERL and STRL (Gov. Code § 21165, Ed. Code § 24109)

  48. Porter IICourt of Appeal Action • The Court of Appeal agreed with OCERS and dismissed the appeal, as premature. • The court invited the parties to stipulate to the amount and duration of TTD payments so the court could resolve the issue. • Porter’s counsel insisted on additional material not relevant to the court’s request so the parties did not arrive at a stipulation.

  49. The Bottom Line OCERS’s Position • TTD is salary replacement for active employees hurt on the job • Active employees do not receive retirement benefits • Once a member retires, they are no longer eligible for TTD • There cannot be overlap of the two!

  50. KATOSH V. SCERA HERE TO DISCUSS THIS CASE IS PHYLLIS GALLAGHER, ESQ. DEPUTY COUNTY COUNSEL SONOMA COUNTY

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